We Like The Quality Of AEON Mall's (TSE:8905) Earnings

The market seemed underwhelmed by the solid earnings posted by AEON Mall Co., Ltd. (TSE:8905) recently. Along with the solid headline numbers, we think that investors have some reasons for optimism.

Check out our latest analysis for AEON Mall

The Impact Of Unusual Items On Profit

Importantly, our data indicates that AEON Mall's profit was reduced by JP¥6.0b, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. If AEON Mall doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On AEON Mall's Profit Performance

Unusual items (expenses) detracted from AEON Mall's earnings over the last year, but we might see an improvement next year. Because of this, we think AEON Mall's earnings potential is at least as good as it seems, and maybe even better! The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that AEON Mall has 1 warning sign and it would be unwise to ignore this.

Today we've zoomed in on a single data point to better understand the nature of AEON Mall's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.